- 6th June 2018
- Posted by: emy
- Category: Blockchain, Cryptocurrency
The ICO/token sale has ushered in a new era of “decentralised and democratised investment and customer-driven business models that expand far beyond the borders of any one country,” says Scott Nelson, CEO of Sweetbridge Inc.
As a result, startups with token sales are looking for jurisdictions where they can more easily raise funds and reach a global audience with the minimum of fuss.
Countries like Gibraltar, Malta, Cyprus, Estonia and Switzerland are working hard to position themselves as ‘blockchain jurisdictions’ and thus reap the economic and financial benefits of being the places that ICOs will gravitate to.
The short sighted USA
The mighty USA is not among that list of countries. Scott Nelson says the United States “has instead taken a short-sighted and enforcement-heavy approach that fails to expand beyond Industrial Era thinking.”
U.S. regulators have made noises indicating that they are friendly to blockchain-based businesses and want to support entrepreneurial efforts in the crypto sphere, but as yet there have been few concrete announcements making this a reality. As Nelson says, “the proof is always in the pudding.”
Cryptocurrency projects in Catch 22 position
The ‘pudding’ he is referring to is that cryptocurrency projects in the USA have what he calls “two unappealing choices.” They can “either issue tokens through outmoded and ill-fitting means that restrict a token’s customer base and resale ability – like registering as a security or claiming a Regulation D exemption – or leave the U.S. altogether.”
Europe to the rescue!
And that is exactly what is happening: token sales are winging their way from the USA to the European jurisdictions mentioned earlier, such as Gibraltar, which has gone one step further than say Switzerland, by “establishing not only guidelines and requirements for companies launching ICOs, but launching a fully-regulated exchange providing listing and liquidity for projects launching there.”
Can the UK get its act together?
Nelson also points to the UK as being the “sleeping giant” in this crypto scenario. It could take the title of “world’s premier financial centre” from the USA by opening up to fintech and the blockchain. Analysing its position, he says: “It is predisposed to a “buyer beware” approach toward these types of products, as opposed to the paternalistic mentality of the U.S. that ensures only rich people get access to the good investment deals.”
There could be many winners from the USA’s slowness to capitalise on the paradigm shift that crypto is bringing. Who will win the race to the top?